Apollo's Rackspace deal is crushing short-sellers

Apollo Global Management just took Rackspace, one of the most heavily shorted stocks, private.

The cloud services company is being acquired for $32 per share in a $4.3 billion deal, which, as Business Insider reporter Akin Oyedele notes, is a 6% premium above Thursday's closing price. It's also a 38% premium to Rackspace's closing price on August 3.

So Rackspace's move to go private is harsh news for a number of its short-sellers. (To short a stock means to bet its price will go down.)

Short-sellers had been adding on to their bet against Rackspace since mid-April, bringing short interest on Thursday to $404 million, according to Ihor Dusaniwsky at S3 Partners, a research firm.

The short float on the stock was 12.7% as of August 15, according to Bloomberg data. And it's in the top 100 of stocks that are being sold short, according to data tracker FinViz.